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    Bond price

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    Zheng Enterprises, issued $100 million of 15% coupon rate bonds in January 2000. The bonds have an initial maturity of 30 years. Bonds were sold at par and were callable in five years at 1110 (110 % of par value). It is now 2005, and interest rates have declined such that bonds of equivalent remaining maturity now sell to yield 11 %. How much would you be willing to pay today and why?

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    Zheng Enterprises, issued $100 million of 15% coupon rate bonds in January 2000. The bonds have an initial maturity of 30 years. Bonds were sold at par and were callable in five years at 1110 (110 % of par value). It is now 2005, and interest rates have declined such that bonds of equivalent remaining maturity now sell to yield 11 %. How much would you be willing to pay today and ...

    Solution Summary

    The expert calculates price of a bond.

    $2.19

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